Google delivered strong Q2 earnings on Thursday, handily beating analysts' estimates and sending its shares up in after-hours trading.
The company reported record revenue of $9.03 billion for the quarter that ended on June 30, 2011, an increase of 32% compared to its 2010 second quarter and a record for the company. Minus the company's $2.11 billion traffic acquisition cost, Google's net revenue comes to $6.92 billion, significantly higher than RBC Capital Markets' $6.6 billion estimate.
Google shares, which closed down 9 points for the day, had jumped over 60 points shortly after the company announced its results at 1pm PDT.
Google's impressive financial performance comes at a time when the company needs some good news: Google is facing antitrust reviews of its search business in the U.S. and Europe, a growing number of patent infringement claims from the likes of Apple, Microsoft, and Oracle against Google and its Android partners, and the rising threat of online activity that it cannot monetize, exemplified by Facebook.
"We had a great quarter, with revenue up 32% year on year for a record breaking over $9 billion of revenue," said Larry Page, CEO of Google, in a statement. "I'm super excited about the amazing response to Google+ which lets you share just like in real life."
In a conference call for investors, Page said that the company's newly launched social network, Google+, had surpassed 10 million users in just two weeks and that users have shared and received more than one billion items through the service. Page also said that Android activations around the globe had reached 550,000 per day.
Page stressed that Google under his watch is striving to make its products beautiful, simple, and easy to use. Beautiful is a relatively new word in the set of terms Google uses to describe itself, one more likely to be heard at Apple events. Google has been criticized in the past for its data-driven design choices. Perhaps not coincidentally, software engineer Andy Hertzfeld, who played an important role in early Apple history, was the design lead for Google+ Circles.
Yet Google's aesthetic ambitions remain balanced by a utilitarian soul: Page said that Google wants to make products that everybody uses twice a day, "like a toothbrush."
He also acknowledged investor concerns about Google's growing headcount and attributed employee numbers in part to a retention program that is proving more successful than anticipated. Noting the company's headcount is "perhaps ahead of where we need to be," Page stressed that Google "will optimize headcount for the long term."
In defense of aggressive hiring, Page said, "Great companies are no greater than the efforts and ingenuity of their people."
Susan Wojcicki, Google SVP and advertising chief, later disclosed that there have been 135 million Android devices activated to date, up from 100 million two months ago. She also said that the Android Market now has more than 250,000 apps and that Android users have downloaded more than 6 billion apps.
Notably absent were Chromebook metrics. Wojcicki mentioned that Chromebooks had gone on sale in mid-June but did not provide any indication of how many had been sold. Perhaps next quarter.
Faced with a question about the Android patent situation, Page responded, "Android is on a tear," and proceeded to cite the figures he mentioned earlier and the growing number of Android devices and business partners. "Despite the efforts of some of our competitors, there hasn't been any slowdown," he said, adding as reassurance, "We're really committed to Android."
At the 2011 InformationWeek 500 Conference, C-level executives from leading global companies will gather to discuss how their organizations are turbo-charging business execution and growth--how their accelerated enterprises manage cash more effectively, invest more wisely, delight customers more consistently, manage risk more profitably. The conference will feature a range of keynote, panel, and workshop sessions. St. Regis Monarch Beach, Calif., Sept. 11-13. Find out more and register.
How Enterprises Are Attacking the IT Security EnterpriseTo learn more about what organizations are doing to tackle attacks and threats we surveyed a group of 300 IT and infosec professionals to find out what their biggest IT security challenges are and what they're doing to defend against today's threats. Download the report to see what they're saying.
2017 State of IT ReportIn today's technology-driven world, "innovation" has become a basic expectation. IT leaders are tasked with making technical magic, improving customer experience, and boosting the bottom line -- yet often without any increase to the IT budget. How are organizations striking the balance between new initiatives and cost control? Download our report to learn about the biggest challenges and how savvy IT executives are overcoming them.